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Exporting the 'Sark Lark' to new markets

Many Britons who make a living from "the signing", as they call it, originate from the tiny Channel Island of Sark, a notorious British tax haven. Following scandals more than a decade ago over the "Sark Lark", the group scattered, setting up residence in far-flung jurisdictions such as Cyprus, Dubai, Vanuatu, Mauritius, or Nevis in the Caribbean. Many still keep in touch on Facebook.

They make up teams of sham company directors, according to documents we have seen, taking money to disguise the real ownership of thousands of international companies. This is not illegal, and they generally say they are helping owners preserve legitimate privacy.

Sarah and Edward Petre-Mears, who moved from Sark to Nevis, worked through an agency in Northamptonshire. Some of their companies have been registered in Britain at Companies House in Cardiff. A Petre-Mears neighbour on Sark, Jesse Hester, went to Cyprus to launch a similar operation called Atlas Corporate Services. He then moved to Dubai with his colleagues Damien Calderbank and Matthew Stokes, and eventually onward to the small Indian Ocean island of Mauritius.

Hester offers his customers "anonymity of the ultimate owners". He tells them: "The prime advantage ... is to place the 'management and control' issue firmly outside a high tax jurisdiction." This allows the owners to claim the company is being run from an overseas tax haven, rather than from where they live.

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Hester says he is a genuine director. His lawyer said: "Our client has the right not to execute documents, can alter bank mandates, can enter into contracts, and is free to resign." The accountants and intermediaries he works for carry out identity checks on their clients, he said, and he complied with all legal requirements.

Atlas is associated with 12 people who between them have held directorships of 1,578 companies in the British Virgin Islands as well as 4460 British companies. They frequently work for Cornhill, a company formation agency run in London by Mark Lance. Lance said his provision of "non-resident directors for legitimate purposes" for occasional clients was not a significant part of the business. "Cornhill does not deny that the use of non-resident directors is open to abuse," but, he said, he obtained "full proof of identity" from all customers.

A second Cyprus nominee operation is run by Sean Lee Hogan, 41, who has put his name to nearly 100 BVI and 743 British companies. He often works for a north London offshoring agent, the Stanley Davis Group. Hogan did not respond to invitations to comment.

Two other Britons who share a flat in east London, Ted Cocks and Joseph Sparks, signed up with a Moscow agency, GSL, to put their names and UK addresses on more than 450 BVI entities. The companies were subsequently sold on to anonymous Russians. They say their activities were legitimate.

Geoffrey Taylor and his son Ian have acted as directors for 291 BVI companies and a further 442 in the UK. From the Pacific island of Vanuatu, they offer clients an extra choice of UK or New Zealand addresses. "You can pick the jurisdiction that best suits you," Geoffrey Taylor emailed one potential customer.

Taylor's brochure even offered the opportunity of having him on their letterhead as "Lord Stubbington", a UK manorial title he purchased.

"He can act as director and shareholder for clients without arousing suspicion that he is a nominee only," it said. "In this way he can act as your frontman and attract attention away from you. Lord Stubbington provides your activities with credibility." Ian Taylor said his father had now retired. "Only a small handful" of the companies they acted for were misused, he said. Nominees were used for various legitimate reasons.

"Clients of certain nationalities are discriminated against only due to their citizenship. Some clients require privacy to avoid problems from jealous family members."

As long ago as 1999, Britain's sham director industry was officially struck down - or so it seemed. The minister Kim Howells, in the Department of Trade and Industry (DTI), boasted: "The government today struck a fatal blow against the practice of so-called 'nominee directorships'." The government went to court to disqualify one Sark islander, Philip Croshaw, who was signing his name on company documents thousands of times.

Howells said: "The trade in providing 'nominee director' services from the island of Sark has been a scandal ... The courts have now effectively outlawed this abuse."

But the investigation shows that Sark's "nominees" simply moved elsewhere, and were never policed by the DTI or its successors, including the Department for Business, Innovation and Skills.